State’s Redevelopment Raid Ruled Legal

— by Jeffrey Wisniewski — 5 May 2010 — Comments Off

The state’s unprecedented raid of local redevelopment funds to balance the budget was ruled legal is Superior Court yesterday. The ruling is devastating to the city of Hercules.

The California Redevelopment Association has appealed the decision. John Shirey, the group’s executive director, commented on the ruling:

Not only does [the ruling] mean a lot of community improvements won’t be done, but the thousands of people who could be put to work mostly in construction won’t get those jobs. That’s bad enough given the current economic climate. But the longer-term implications are even more severe.

If the decision stands permanently, then it could mean the beginning of the end for redevelopment in California. That’s not an exaggeration on my part. Everyone knows that the state of California has a severe structural deficit problem it seems incapable of dealing with. We know it’s going to continue for some years.

If the court says “you can take redevelopment money whenever you wish and for whatever purpose you wish,” that means redevelopment agencies will have no assurance from one year to go the next that they will have any money to work with. If they don’t know that, they can’t make long-term commitments for issuing bonds, for making commitments to housing or public projects of any sort because they don’t know if they will have the money.